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Monday, 16 June 2008

One of the few positive outcomes of the continued neoliberal dominance of government thinking on public services is it's stimulating serious thinking around non-market policy alternatives. An important contribution to this process comes from the TUC'sRethinking Public Service Reform: The Public Value Alternative, a pamphlet published last week. Written by Mick McAteer it argues for a completely different model of public service, one eschewing the market fundamentalism of New Labour and the Conservatives and embracing different principles of operation. The pamphlet is split into two broad sections: an explanation and critique of market-based reforms of public services; and an examination of the ideas underpinning the 'Public Value' approach and how they can be implemented in a democratic and participatory fashion.

It begins with the stunning observation that £44 billion of public services are now provided by the private sector, and this slice is forever growing. To give a local example, not content with closing schools and re-opening them as academies, as well as presiding over PFI community centre and office builds, Stoke-on-Trent City Council intends to enter into so-called 'strategic partnerships', which will see the contracting out of council call centres, IT, benefits processing and its personnel bureaucracy to private firms. All in the name of "cost" and "efficiency". This dovetails the orthodoxy dominating public service provision in Britain, that market discipline grinds costs down and continually improve services, otherwise 'consumers' will go elsewhere.

The pamphlet is careful to distinguish between the simple and sophisticated market-based approaches governments of the last 30 years have experimented with. For the first three terms of Tory government the private sub-contracting of (some) public services was solely concerned with cost and efficiency measures, to the detriment of the service itself. Under Major and then Blair the solutions became more complex: cost and efficiency were still the primary concerns, but they had quality measures built in too. Advocates of these new measures boasted the market could deliver universal and free at the point of need services better than the old welfare bureaucracy. The problem with this of course was capital tended to be attracted to those services who could guarantee the highest return, a problem afflicting simple and sophisticated policies alike, leading to public money being squandered by governments to make these new markets look more attractive and less risky. Secondly, private financing is in fact less efficient. Government funding ensures capital is available to public services at a cost beneath that of private funds, plus the latter's responsibility to their share holders have to build returns into costing plans. For example, the pamphlet cites PFI projects adding 1-3 per cent extra costs above what would have been the case for public borrowing. Another figure adds an extra £200,000-£300,000 per year for every £10 million invested in the PFI. There is no risk here for the contractor - every project is underwritten by the taxpayer, which is hardly an efficiency incentive! McAteer provides plenty of back-up evidence for the prosecution from social care and care homes; and the grandiose claims made for private finance refuted with reference to NHS Direct, the DWP and Job Centres.

As we have seen previously, there has never been a public clamouring for market economics and this is especially true of public services. For example, readers may recall the mainstream parties in the 2005 election battling over patients' right to choose the hospital who would provide their treatment. Research suggests most patients thought it irrelevant. In a YouGov poll, 89 per cent of respondents agreed "public services should be run by the government or local authorities, rather than private companies". The attitudinal evidence piles up against the marketisation of the public sector.

But there is an alternative, McAteer argues. The 'public value' approach reconceptualises value in stubbornly non-economic terms. The value generated in the private sector can be reduced to costs, balances and profits. But that created by public service has economic impacts too, on top of social/cultural value, equity, democratic and citizenship values and contributes to the long term sustainability of socio-economic relationships. Opening up and broadening the understanding of value beyond conventional economic terms means "public value can only be identified and assessed through a process of democratic engagement between service providers and service users. ...[T]his means the establishment of forums within which providers and users set priorities and develop strategies for public service delivery". Because they still require large funds sourced from the taxpayer this too must be considered one community of interest in the negotiation process.

According to the The Work Foundation public value is a timely and necessary guide to public sector reform. It would strengthen democratising processes in society and establish a more direct connection between those who decide and deliver public services, and those who use them. This engagement with users as citizens as opposed to passive consumers could increase their satisfaction and simultaneously empower them by giving them a say over how services are provided, something sorely lacking at present. In addition, public value improves the flexibility and responsiveness of services, there is no need for overly elaborate deliberative mechanisms when users can supply feedback at the point of use. McAteer adds his own advantages. First, it is a practical and non-utopian way of realising democratic welfare reform. In fact, because resources are limited in capitalist societies the need for dialogue and deliberation over their allocation is all the more necessary. Secondly public value is adaptable to a variety of settings: whereas market-based approaches ultimately reduce everything to the bottom line, democratic deliberation could enhance service provision regardless of its character.

McAteer identifies two problems with public value. Firstly, case studies offering supportive evidence are few and far between. More experimentation and trials need to be carried out (perhaps the unions as 'service providers' themselves could volunteer?). Secondly and linked to this is that rolling out public value procedures must be informed by best practice. Careful thought has to be put into the implementation of public value measures for it to succeed, otherwise the process could become chaotic and bureaucratic very quickly.

But overall public value is something the left should embrace. For starters it has the potential of reclaiming the language of empowerment from those who would dismantle the public sector because it is "faceless" and "unresponsive" and replace it with market-based provision - something that I noted previously. Secondly the spread of public value ideas and its implementation would furnish socialists a powerful new weapon in our perpetual war of position with neoliberal ideology and capital. It creates an impulse toward democratisation and decommodification that can not only undo the damage wreaked on public services by Conservatives and Labour alike, but threatens to offer a model that could be applied to all kinds of institutions. A socialist spectre in its public value guise could once again haunt capital, sending shivers down the spines of the ruling class.

Implementing public value would not be a simple task but neither have been the numerous wasteful attempts to apply market discipline to public services. But in public value we have a serious effort to realise the socialist demand of democratic control by workers and service users. For this reason the left should take it up and turn it against the ruling neoliberal consensus that can deliver bumper profits for the few, but very little for everyone else.

Public value - public service. I'd say they are crucial, even if it's hard to measure 'value' and even if some models of public service have failed. The idea of citizens as users, rather than passive consumers seems promising, but incorporating it into public policy is harder then it looks - it would require a re-thinking of the whole public policy process. Unfortunately, we do not seem to be heading towards the public service model...